EUR/USD: what are US intentions in Iran?

On the EUR/USD, the system is in immediate equilibrium, but the forces present are important. On the one hand, pressure is being exerted on the single currency, one of the most reliable barometers of risk appetite on financial markets. And on the other hand, the green note also suffered from an intense pressure force due to its decorrelation mechanics with the barrel price, sharply rising after the embrace of the geopolitical situation in the Middle East.

Exchangers are in the immediate anxious as to a potential direct military intervention of the US military in the conflict. On this point, Christopher Dembik, investment strategy advisor at Pictet AM is rather reassuring:

"For the markets, the question is to know how extensive the US engagement in the Israeli-Iranian conflict will be. Hence the fragility observed yesterday. For now, this is limited to providing strategic intelligence to the Israeli government and transferring military aircraft, notably bombers, in the Gulf bases and especially in Diego Garcia There is more fear than evil, so far Many investors fear the blockade of the Strait of Hormuz does not seem credible Guardians of the revolution have apparently tried to confuse the signals GNSS (satellite navigation) in the area, with very mitigated success Only two merchant ships would encounter difficulties The traffic is fluid and normal, as the satellite imagery proves."

Yesterday the Fed acquired a new Monetary Policy Committee, sold unsurprisingly by a status quo on rates, which further fed the ire of Trump, who keeps putting pressure on J "Too Late" Powell, as he scornfully nicknames him.

"Investors well feel that it is mainly trade policy that worries the Fed chair relative to inflation. And markets don't like this situation in the short term as the Fed has lowered its growth forecast for this year (1.4% vs 1.7% in March) and slightly raised its rate forecast of unemployment...", comments Alexandre Baradez, market analyst for IG France.

Traders will be deprived this landmark Thursday from Wall Street, whose doors will remain closed on 19 June, Juneteenth National Independence Day, also known as Freedom Day, Emancipation Day, or Jubilee Day.

On the macroeconomic agenda this Thursday, to follow in priority the monetary policy decision, from the Bank of England. Note that the Swiss National Bank this morning communicated a holding at 0% of its principal franc yield. Yesterday on this statistical front, the final consumer price data for May did not deviate one iota from earlier estimates, at +2.4% annually excluding food, energy, alcohol and tobacco. Weekly enrollments to unemployment allowances meanwhile spring perfectly within the target at 246,000 new units.

Right now, the EUR/USD is trading at $1.1467.

KEY CHART ELEMENTS
On Thursday the spot broke free of a resistance area at $1.1460, an area that is already being tested early, in the form of a pullback this Friday. The absence of bullish expansion after the $1.1460 franking casts doubt as to the spot's ability to continue in the coming weeks its upward move from the bottom. The test of the 50-day moving average (in orange) will therefore be essential.

MEDIUM TERM FORECAST
In view of the key graphical factors we have mentioned, our view is neutral to medium term on the EUR/USD.

We will maintain this neutral view as long as the EUR/USD is positioned between support at $1.1202 and resistance at $1.1674.